PM Modi, EU leaders announce conclusion of India-EU Free Trade Agreement

Prime Minister Narendra Modi on Tuesday announced the signing of the India–EU Free Trade Agreement (FTA), saying it accounts for 25 per cent of global GDP and one-third of global trade.

Addressing the Indian Energy Week virtually, Modi congratulated stakeholders on the EU–India trade deal and said, “I am informing you about a big development … a significant agreement was signed between India and Europe yesterday (Monday).”

The prime minister said people were discussing it as the “mother of all deals” and added that the agreement has created opportunities for 140 crore Indians and crores of Europeans.

“This is an excellent example of coordination between two economies of the world. This agreement represents 25 per cent of the global GDP and one third of the global trade,” he said.

Modi said the free trade agreement with the European Union would complement India’s trade agreements with Britain and the European Free Trade Association (EFTA), and would help strengthen global trade and supply chains.

He congratulated the youth and those associated with sectors including textiles, gems and jewellery, leather, and shoes, saying the agreement would prove helpful for them.

The prime minister said the deal would boost manufacturing in India and further expand the services sector.

“This free trade agreement will strengthen confidence in India for every business and every investor in the world. India is working extensively on global partnerships in all sectors,” he said.

European Commission President Ursula von der Leyen also confirmed the conclusion of the trade agreement as Modi hosted her and European Council President Antonio Costa at a summit aimed at elevating bilateral ties amid geopolitical turbulence and trade disruptions.

“Europe and India are making history today. We have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit,” von der Leyen said.

“This is only the beginning. We will grow our strategic relationship to be even stronger,” she said.

Von der Leyen and Costa had graced India’s 77th Republic Day celebrations at the Kartavya Path as chief guests on Monday.

The long-awaited free trade agreement is expected to significantly expand the overall trajectory of India-EU engagement by opening up new opportunities for cooperation across a range of sectors.

Following the summit, the two sides are set to ink a document to formally announce the conclusion of the FTA negotiations. However, it may take at least six months to formally sign the agreement as it will require legal scrutiny by both sides.

India and the European Union first launched negotiations for a free trade agreement in 2007, before talks were suspended in 2013 due to differences in ambition. Negotiations were relaunched in June 2022.

The European Union, as a bloc, is India’s largest trading partner in goods. In the financial year 2024–25, total trade in goods between India and the EU stood at about USD 136 billion, with exports of around USD 76 billion and imports of USD 60 billion.

The summit discussions focused on trade, defence and security, climate change, critical technologies, and strengthening the rules-based global order. In addition to firming up the free trade agreement, the two sides are set to unveil a defence framework pact and a strategic agenda.

India and the European Union have been strategic partners since 2004. A proposed Security and Defence Partnership (SDP) is expected to facilitate deeper defence and security cooperation, including greater interoperability, and open avenues for Indian firms to participate in the EU’s SAFE (Security Action for Europe) programme.

SAFE is a Euro 150 billion financial instrument designed to support EU member states in speeding up defence readiness.

At the summit, India and the EU are also set to launch negotiations for a Security of Information Agreement (SOIA), which is expected to boost industrial defence cooperation.

The two sides are also expected to sign an agreement to facilitate the mobility of Indian workers to Europe, providing a framework for advancing mobility initiatives by EU member states with India. France, Germany and Italy are among the European countries that already have migration and mobility partnerships with India.

India and the EU are also expected to sign several agreements aimed at deepening cooperation in other sectors, while deliberating on global challenges including the Russia-Ukraine war.